Rea Gold to test NWT prospect

A gold property in the Northwest Territories is providing a new exploration focus for Rea Gold (TSE). Rea is a Vancouver-based junior with a 30% interest and 5% net smelter return in the producing Samatosum mine near Barriere, B.C. As project operator Minnova (TSE) has Samatosum up and running with improved production of silver, gold, zinc, copper and lead, Rea is turning its attention to a new prospect that has potential for both placer and lode gold deposits.

The Selena Creek property, 100 miles northeast of Watson Lake, is 50% owned by Verdstone Gold (VSE) and 50% by Sirius Resource Corp. (VSE). Larry Reaugh is president of both Rea Gold and associated company Verdstone.

Rea Gold’s proposed foray into placer mining has raised some eyebrows, given the risks often associated with this type of mining. But the company’s direct exposure is minimal in that the agreement with Verdstone and Sirius allows Rea Gold to be operator for management fees and certain financing rights.

Verdstone has already earned its interest in the property by funding a test sampling program carried out by Sirius last winter in gravels along a 10,000-ft. section of the Selena Creek Valley. Although several distinct placer deposit types covered by thin overburden were identified, work was restricted to testing the valley bottom sediments.

Despite heavy gold losses during sluicing under winter conditions, the results from a number of test pits were sufficiently encouraging for Rea Gold to plan an expanded exploration program this season.

Once weather permits, the company plans to start reconnaissance mapping and test pitting of the upper benches and other placer targets including a possible terminal moraine. Because of gold losses in last year’s program, many of the test pits on the valley bottom will also be re-sampled. Assuming positive results, the final staged objective will be to prove up and mine economic placer deposits.

In addition, the company is planning a reconnaissance mapping program aimed at identifying possible bedrock sources of the placer gold on the 19,000-acre property. The bulk of the gold encountered to date is generally jagged, plus-48 mesh and has a high Corey factor, which leads the companies to speculate the lode source is nearby.

The source is believed to be a system of quartz veins and alteration zones found both within a quartz monzonite intrusive, and along its contact with limestones and sediments found at the headwaters of Selena Creek.